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Important Deadline for Employers: Submit Employee Income Data by March 1st to Avoid Penalties

Timely compliance ensures a smoother tax filing process for over 2 million employees.

The Inland Revenue Authority of Singapore (IRAS) reminds all employers that they are legally obligated to submit their employees’ 2023 employment income information by March 1, 2024. This requirement applies to employers already participating in the Auto-Inclusion Scheme (AIS) and those with 5 or more employees in 2023. Failing to comply with this mandate constitutes an offense under the Income Tax Act.

900 Employers Hit with Fines, Totaling $1.1 Million, for Non-Compliance

Failure to submit employee income information by the March 1st deadline carries significant consequences. Employers face fines of up to $5,000, increased from $1,000 last year. Key personnel like directors or partners risk even steeper penalties, including fines up to $10,000 and potential imprisonment for up to 12 months.

Compliance in 2023 remained low, with 10% of employers on the Auto-Inclusion Scheme (AIS) failing to file on time despite reminders. Consequently, IRAS prosecuted over 900 non-compliant businesses, resulting in penalties exceeding $1 million.

The most common sectors for late submissions included restaurants, food and beverage outlets, construction, wholesale and retail trade, and beauty services. Reasons cited often involved changes in personnel handling AIS or difficulties managing administrative tasks.

For specific guidance on filing procedures and compliance, please refer to Annex A – Essential Steps for Employers in Specific Circumstances  (PDF, 16KB).

Simplified Tax Filing for Over 2 Million Employees with AIS

The Auto-Inclusion Scheme (AIS) simplifies tax filing for over 2 million employees by automatically including their income information in their tax returns. This reduces the risk of underreporting and unintentional errors. This year, employees whose employers are on the AIS will benefit from:

• Pre-filled tax returns: Over 2 million employees will enjoy pre-filled tax returns with their income information automatically populated, eliminating the need for manual input.
• No-Filing Service (NFS): Eligible employees may qualify for the NFS, eliminating the need to file a tax return altogether.

Timely Employer Action is Crucial

For employees to enjoy these benefits, it’s critical for employers to submit their employees’ income information on time. Failure to do so can result in:

• Missing data on pre-filled tax returns: This can lead to inaccurate tax bills and delayed tax assessments for employees.
• Potential penalties for employers: Late filing may incur penalties from the tax authorities.

Verify Your Employer’s AIS Status

To ensure you enjoy the convenience of AIS, check if your employer is on the scheme by visiting the Search AIS Organisation page.

Over 110,000 Employers to File Employee Income Data on AIS by March 1st

This year, a record-breaking 110,000 employers are expected to participate in the Auto-Inclusion Scheme (AIS). The Inland Revenue Authority of Singapore (IRAS) reminds all eligible employers to submit their employees’ employment income information by March 1st, 2024.

Who needs to file?

• Employers with 5 or more employees in 2023, regardless of their previous participation in AIS.
• Employers who already joined AIS in previous years.

These employers would have received a letter from IRAS in January 2024 outlining their AIS obligations.

Joining AIS for the first time?

Employers with less than 5 employees who are interested in joining AIS for the next tax filing year (YA 2025) can register between April 1st and December 31st, 2024, through the myTax Portal.

Submitting Employee Income Data:

Employers can submit employee income records via:

• Eligible payroll software: Submit directly to IRAS.
• myTax Portal: Submit online.

More details on filing seamlessly from software can be found at go.gov.sg/iras-sffs.

Avoid Penalties: Ensure Accurate AIS Filing and Consider Voluntary Disclosure

Accurate employee income information submitted through AIS is crucial for calculating taxes correctly. Employers should avoid common errors listed in Annex B – Common AIS Filing Errors Made By Employers (PDF, 16KB) to prevent penalties.

Submitting inaccurate information is an offense, potentially leading to penalties up to twice the undercharged tax. To mitigate such penalties, employers can participate in IRAS’ Voluntary Disclosure Programme (VDP).

The VDP allows for voluntary disclosure of past errors or omissions in employee information. This can significantly reduce penalties, encouraging timely correction and compliance.

Learn more about the VDP and its benefits at go.gov.sg/iras-iitvdp .

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